Channel NewsAsia
Updated: 03/06/2013 04:24 | By Channel NewsAsia

WP’s proposal on labour force participation is "hopeful but unrealistic": Dr Khor

WP’s proposal on labour force participation is "hopeful but unrealistic": Dr Khor


WP’s proposal on labour force participation is "hopeful but unrealistic": Dr Khor

SINGAPORE: Minister of State for Manpower Amy Khor has described the opposition Workers’ Party’s proposal to boost Singapore’s labour force participation rate to 78.7 per cent by 2025 as "hopeful but unrealistic".

Speaking during the Budget Debate in Parliament on Tuesday, Dr Khor also explained why it would be challenging to push for a more progressive tax system.

The Workers’ Party has said it’s possible to grow the labour force participation rate by tapping on women and seniors. It said the rate for those aged between 15 to 69 years can go up to 78.7 per cent by 2025, compared to 72.2 per cent last year.

But Dr Khor said Singapore’s total labour force participation rate is already one of the highest in the world.

Dr Khor said: "The labour force participation rate for older Singaporeans tend to be lower than the younger segments of the workforce. And as our workforce is getting older and with a low TFR (Total Fertility Rate), our overall labour force participation rate will decrease over time despite improvements across age groups.

"Hence the Workers’ Party proposal in its population paper to raise labour force participation rate for those aged between 15 to 69 by 0.5 per cent per annum till 2025 to reach some 78.7 percent is hopeful but unrealistic as that rate is even higher than Sweden, currently 74.8 per cent."

On the tightening of foreign worker policies, Dr Khor reiterated that the government has chosen to adopt a calibrated approach instead of halting numbers.

"If the pace of change is too hurried, for example, by freezing the foreign worker growth immediately as some are championing, the consolidation may be too drastic and the job losses due to company failures, many of which are owned by Singapore, may be irreparable. The ultimate victim may be the Singaporean worker," she said.

Dr Khor also cautioned against pushing for a more progressive tax system to tackle the issue of income inequality.

She noted that the top 11 per cent of earners in Singapore already contribute almost 80 per cent of the total tax takings, compared to 45.1 per cent in the United States and 31.6 per cent in OECD countries.

Dr Khor said: "Singapore is already far more progressive than the US and OECD average in terms of personal income tax. So there may not be much scope to raise income taxes here without affecting Singapore’s international competitiveness."

She acknowledged the opposition’s support for measures to address the income divide.

Pointing to initiatives like the higher Workfare Income Supplement, she said this year’s budget redoubles efforts on social equity and to uplift the lives of low—wage workers and the vulnerable elderly.

Dr Khor said: "No budget in a single year can satisfy all the diverse and often opposing needs of Singaporeans. There will always be some trade—offs, and I submit, "trade—offs" is not a bad word or an excuse for poor thinking or a lack of fresh ideas.

"In my view, Budget 2013 is a well calibrated budget that builds on our efforts to transform our economy to achieve quality growth that will provide all Singaporeans with a better life and at the same time tackle the short—term pains and challenges faced."

— CNA/de

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